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Will Passives Become Too Popular?

At what point will passive funds become so dominant that market inefficiencies arise, allowing more active fund managers to add value?

Hortense Bioy, CFA 21 August, 2014 | 10:22
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This article was originally published in Investment Adviser magazine in the UK.

I’ve twice been asked an interesting, yet puzzling, question about the rise of passive investing in the past few weeks.

Given the growing popularity of passive investment products, such as exchange-traded funds and index trackers, at what point will they become so dominant that market inefficiencies arise, allowing more active fund managers to add value?

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About Author

Hortense Bioy, CFA

Hortense Bioy, CFA  Hortense Bioy, CFA, is Director of passive fund research for Morningstar Europe.

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